DNB today (Thursday) became the first European issuer to sell a US targeted benchmark covered bond this year, after SEB yesterday placed an inaugural, $1.25bn five year senior unsecured deal as dollars offered high quality Yankee names better terms than euros.
Swedbank priced its second US dollar senior unsecured benchmark on Tuesday, a well received $1bn (Eu764m/Skr6.34bn) five year deal that bankers said offered attractive funding versus euros.
Spreads on Nykredit ARM bonds widened slightly today (Thursday) after some tightening of its one year bonds yesterday broke a softening trend, while levels on Realkredit Danmark and DLR Kredit one year bonds were almost unchanged.
A proposal by Denmark’s mortgage banks to relax amortisation requirements for borrowers on interest-only loans is credit negative for Danish banks, Moody’s said on Friday, because it highlights pressure on asset quality in the context of high levels of indebtedness and weak housing markets.
One of the most pressing issues regarding banking regulation and covered bonds has been the treatment of covered bonds for the Liquidity Coverage Ratio.
Danish covered bond legislation has been amended to allow for a broader use of so-called Junior Covered Bonds (JCBs), making them the first financial instrument explicitly designed to satisfy non-statutory OC requirements that essentially stem from rating agency considerations.
Changes to Swedish regulations to improve monitoring and contain risks such as falling property values support Swedish covered bonds as a “safe and effective” funding instrument, Moody’s said on Tuesday.
Moody’s downgraded the ratings of SpareBank 1 Nord-Norge and Sparebanken Hedmark from A1 to A2 on Monday, but confirmed the A2 ratings of SpareBank 1 SMN and SpareBank 1 SR-Bank, citing a weakening of the SpareBank 1 Alliance.
A mortgage cap introduced in Sweden in 2010 is “still working” and a recent trend of rising LTV ratios has been broken, the country’s Financial Supervisory Authority said today (Thursday), citing results of an annual mortgage survey.
Norway’s FSA appears to have come out in favour of a bank-by-bank approach to assessing risks associated with covered bond issuance, according to feedback given to the ministry of finance, while Norges Bank has opposed giving covered bond companies regular access to its liquidity facilities.